What the 555 rule says is that if you start investing a small sum of ₹5,000 a month at the age of 25, then after 30 years, at age 55, you can end up with a corpus of ₹2.64 crore.

Microsoft founder Bill Gates, famously said, “If you are born poor, it is not your fault. However, it is entirely your fault if you die poor.”

Gates’ comment was not out of whack. If you do your retirement planning well in advance and systematically, you could end up being self-sufficient and financially independent in your retirement years. The earlier you start retirement planning, the better it is.

Understanding the 555 Rule for Retirement

Every person wants to retire rich, or have enough to last a lifetime. Today, having a sound retirement corpus is not about hitting the proverbial pot of gold or inheriting a fortune. You can actually invest money on a regular basis to achieve the goal of a comfortable life after retirement. All that’s required are discipline to start early and the persistence to stick to the plan.

What the 555 rule says is that if you start investing a small sum of Rs 5,000 a month at the age of 25, then after 30 years, at age 55, you can end up with a corpus of Rs 2.64 crore. We are not assuming some supernormal or outlandish return here. Just a humble 12 percent compounded return (per year). Your first reaction would be to immediately use an online SIP (systematic investment plan) calculator and verify this claim.